Household debt is defined as the combined debt of all people in a household. It includes consumer debt and mortgage loans. A significant rise in the level of this debt coincides historically with many severe economic crises and was a cause of the U.S. and subsequent European economic crises of 2007–2012. Several economists have argued that lowering this debt is essential to economic recovery in the U.S. and selected Eurozone countries.[1][2][3]

Household debt can be defined in several ways, based on what types of debt are included. Common debt types include home mortgages, home equity loans, auto loans, student loans, and credit cards. Household debt can also be measured across an economy, to measure how indebted households are relative to various measures of income (e.g., pre-tax and disposable income) or relative to the size of the economy (GDP).

The burden of debt can also be measured in terms of the amount of interest it generates relative to the income of the borrower, for example, the U.S. Federal Reserve measures the "household debt service ratio" (DSR), an estimate of the ratio of debt payments to disposable personal income. Debt payments consist of the estimated required payments on outstanding mortgage and consumer debt, the Fed also measures the "financial obligations ratio" (FOR), which adds automobile lease payments, rental payments on tenant-occupied property, homeowners' insurance, and property tax payments to the debt service ratio. Homeowner and renter FORs are calculated by applying homeowner and renter shares of payments and income derived from the Survey of Consumer Finances and Current Population Survey to the numerator and denominator of the FOR, the homeowner mortgage FOR includes payments on mortgage debt, homeowners' insurance, and property taxes, while the homeowner consumer FOR includes payments on consumer debt and automobile leases.[4]

In the 20th century, spending on consumer durables rose significantly. Household debt rose as living standards rose, and consumers demanded an array of durable goods, these included major durables like high-end electronics, vehicles, and appliances, that were purchased with credit. Easy credit encouraged a shift from saving to spending.

Households in developed countries significantly increased their household debt relative to their disposable income and GDP from 1980 to 2007 — one of the many factors behind the U.S. and European crises of 2007–2012. Research indicates that U.S. household debt increased from 43% to 62% of GDP from 1982 to 2000.[5]

U.S. households made significant progress in deleveraging (reducing debt) post-crisis, much of it due to foreclosures and financial institution debt write-downs. By some measures, consumers began to add certain types of debt again in 2012, a sign that the economy may be improving as this borrowing supports consumption.[6]

"Household debt soared in the years leading up to the Great Recession. In advanced economies, during the five years preceding 2007, the ratio of household debt to income rose by an average of 39 percentage points, to 138 percent; in Denmark, Iceland, Ireland, the Netherlands, and Norway, debt peaked at more than 200 percent of household income. A surge in household debt to historic highs also occurred in emerging economies such as Estonia, Hungary, Latvia, and Lithuania, this occurred largely because the central banks implemented a prolonged period of artificially low policy interest rates, temporarily increasing the amount of debt that could be serviced with a given income. The leveraging up fueled a consumption boom that, ironically, boosted GDP in the countries in question, but represented not a sustainable 'boost to aggregate demand' but instead a mere pulling forward of consumption, as people took on new 30-40 year debt to pay for current year expenditures.

The predictable fallout of this policy is the slow growth that these countries are experiencing today, at the time, the concurrent boom in both house prices and the stock market - as the prices of financed and financial assets were bid up by virtue of the same low rates - meant that household debt relative to assets held broadly stable, which masked households' growing exposure to the eventual sharp fall in asset prices. House prices in particular were vulnerable to sharp movements in policy rates in countries in which most mortgages are adjustable-rate, as 30-40 year loans are highly rate sensitive, house purchases are financed at 80-95% of the price, and only 4-5% of homes change owners in a year.

Despite this low volume, the appraisal rules in most countries limit the number of times that a sale can serve as a comp only in terms of time (12 months), not the number of times that a given sale can be used as a comp - because of this, a "cash out refi boom" followed the low-rate-driven-price-increase - this was the primary vehicle through which developed countries' households leveraged up, on the supply side, home builders are also financed at short rates (in the US, Prime). Their cost of capital was effectively cut in half by virtue of the central bank rate cuts, enabling them to overbuild in response to the rise in prices - with all the new supply making the eventual price collapse worse than it would otherwise have been.

In short, the entire episode was straight out of Ludwig von Mises' 'Human Action', Chapter 20, with the new twist that most of the debt was incurred on the consumer side. When rising consumer prices forced the central banks to allow policy rates to rise back up toward market rates, the wind propping up house prices was taken away. House prices immediately declined, ushering in the global financial crisis. Many households, who had reduced their savings out of a belief in the "wealth effect," saw their wealth shrink relative to their debt, and, with less income and more unemployment, especially in the previously booming real estate sector, found it harder to meet mortgage payments. "Strategic defaults" became common, as homeowners with significant negative equity simply abandoned the home and the debt.

By the end of 2011, real house prices had fallen from their peak by about 41% in Ireland, 29% in Iceland, 23% in Spain and the United States, and 21% in Denmark. Household defaults, underwater mortgages (where the loan balance exceeds the house value), foreclosures, and fire sales became endemic to a number of economies. Household deleveraging by paying off debts or defaulting on them has begun in some countries, it has been most pronounced in the United States, where about two-thirds of the debt reduction reflects defaults.

Of note, Germany, in which almost all mortgages carry 10 year pricing, and in which the 10 year interest rate did not decline during the 2000s, no housing bubble occurred at all. Also, in Canada, in which most mortgages are ARMs but 3-5 year, and which experienced a muted drop in intermediate-term rates, the housing bubble was more muted than in neighboring US. [2][7]

U.S. household (HH) debt (measured by the FRED variable "CMDEBT")[8] rose relative to both GDP and disposable income over the 1980 to 2011 period.

Household debt as a % disposable income rose from 68% in 1980 to a peak of 128% in 2007, prior to dropping to 112% by 2011.

Household debt as a % nominal GDP rose from 47% in 1980 to a peak of 94% in 2009, prior to dropping to 77% in 2012.[9]

U.S. household debt rose from nearly zero in the 1950s to $13.8 trillion in 2008, before declining to $12.9 trillion by Q2 2012.[10]

Consumer credit outstanding includes credit cards, auto loans, student loans, and other types of household debt, but excludes mortgages, it rose from 14.0% GDP in January 1990 to 18.0% GDP by January 2009. It fell to a trough of 16.4% GDP in July 2010 and was back up to 17.5% GDP by January 2013.[11]

This increase in debt from 1980 to 2007 enabled spending that stimulated the economy, arguably "papering over" or hiding the sustainable economic growth rate excluding this increase in leverage, this debt overhang then began holding back the economy as consumers paid down debt (which reduces economic activity) rather than spending.[12]

Paul Krugman wrote in December 2010: "The root of our current troubles lies in the debt American families ran up during the Bush-era housing bubble. Twenty years ago, the average American household’s debt was 83 percent of its income; by a decade ago, that had crept up to 92 percent; but by late 2007, debts were 130 percent of income. All this borrowing took place both because banks had abandoned any notion of sound lending and because everyone assumed that house prices would never fall. And then the bubble burst. What we’ve been dealing with ever since is a painful process of 'deleveraging': highly indebted Americans not only can't spend the way they used to, they're having to pay down the debts they ran up in the bubble years, this would be fine if someone else were taking up the slack. But what's actually happening is that some people are spending much less while nobody is spending more—and this translates into a depressed economy and high unemployment. What the government should be doing in this situation is spending more while the private sector is spending less, supporting employment while those debts are paid down. And this government spending needs to be sustained: we're not talking about a brief burst of aid; we’re talking about spending that lasts long enough for households to get their debts back under control. The original Obama stimulus wasn’t just too small; it was also much too short-lived, with much of the positive effect already gone."[13]

In April 2009, U.S. Federal Reserve Vice Chair Janet Yellen discussed the situation: "Once this massive credit crunch hit, it didn’t take long before we were in a recession, the recession, in turn, deepened the credit crunch as demand and employment fell, and credit losses of financial institutions surged. Indeed, we have been in the grips of precisely this adverse feedback loop for more than a year. A process of balance sheet deleveraging [paying down debt] has spread to nearly every corner of the economy. Consumers are pulling back on purchases, especially on durable goods, to build their savings. Businesses are cancelling planned investments and laying off workers to preserve cash. And, financial institutions are shrinking assets to bolster capital and improve their chances of weathering the current storm. Once again, Minsky understood this dynamic, he spoke of the paradox of deleveraging, in which precautions that may be smart for individuals and firms—and indeed essential to return the economy to a normal state—nevertheless magnify the distress of the economy as a whole."[14]

The policy prescription of Ms Yellen's predecessor Mr Bernanke was to increase the money supply and artificially reduce interest rates, this stoked another debt and asset bubble. Mr Krugman's policy was to ensure that such borrowing took place at the federal government level, to be repaid via taxes on the individuals who he admitted were already overburdened with their own debts, these policies were arguably a mere return to the policies that inflated the debt bubble in the first place.

Economists Atif Mian and Amir Sufi wrote in 2014 that:

Historically, severe economic downturns are almost always preceded by a sharp increase in household debt.

U.S. household spending declines were largest in geographic areas with a combination of higher household debt and larger price declines.

When housing prices fall, poorer homeowners (with a larger proportion of their net worth in their home) are hit the hardest financially and reduce their consumption relatively more than wealthier households.

Declines in residential investment preceded the recession and were followed by reductions in household spending and then non-residential business investment as the recession worsened.[3]

Ezra Klein wrote in August 2011: "[W]hat distinguishes crises like this one from typical recessions is household debt. When the financial markets collapsed, household debt was nearly 100 percent of GDP. It’s now down to 90 percent; in 1982, which was the last time we had a big recession, the household-debt-to-GDP ratio was about 45 percent. That means that in this crisis, indebted households can’t spend, which means businesses can’t spend, which means that unless government steps into the breach in a massive way or until households work through their debt burden, we can’t recover; in the 1982 recession, households could spend, and so when the Federal Reserve lowered interest rates and made spending attractive, we accelerated out of the recession. The utility of calling this downturn a “household-debt crisis” is it tells you where to put your focus: you either need to make consumers better able to pay their debts, which you can do through conventional stimulus policy like tax cuts and jobs programs, or you need to make their debts smaller so they’re better able to pay them, which you can do by forgiving some of their debt through policies like [mortgage principal reduction] or eroding the value of their debt by increasing inflation. I’ve heard various economist make various smart points about why we should prefer one approach or the other, and it also happens to be the case that the two policies support each other and so we don’t actually need to choose between them. All of these solutions, of course, have drawbacks: if you put the government deeper into debt in order to help households now, you increase the risk of a public-debt crisis later. That’s why it’s wise to pair further short-term stimulus with a large amount of long-term deficit reduction. If you force banks to swallow losses or face inflation now, you need to worry about whether they’ll be able to keep lending at a pace that will support recovery over the next few years, but as we’re seeing, not doing enough isn’t a safe strategy, either."[15]

Economist Amir Sufi at the University of Chicago argued in July 2011 that a high level of household debt was holding back the U.S. economy. Households focused on paying down private debt are not able to consume at historical levels, he advocates mortgage write-downs and other debt-related solutions to re-invigorate the economy when household debt levels are exceptionally high.[16] Several European countries also had high household debt levels relative to historical averages leading up to the European sovereign-debt crisis. Recent research also supports the view that excessive household leverage has contributed to the weakness in consumption.[17]

Rana Foroohar wrote in July 2012: "[R]esearch shows that the majority of job losses in the U.S. since the Great Recession were due to lower consumer spending because of household debt, a decline that resulted in layoffs at U.S. firms. Parting back debt is the precursor to greater spending and greater growth."[18]

Neil Irwin explained the economic effects of rising consumer credit outstanding (i.e., all types of household debt other than mortgages) in July 2013: "Americans are finally feeling more confident about the economy and thus willing to take on debt. Lenders, meanwhile, are growing more comfortable extending loans, the spending enabled by this rising consumer debt can help create a virtuous cycle in which more demand for goods and services creates more jobs, which creates rising income. Indeed, more borrowing by households (and the spending that results) is likely offsetting some of the pain caused by federal spending cuts and deficit reduction."[19]

Since most middle income households have the majority of their wealth invested in their home, paying down debt from income can take a decade or longer when a housing bubble bursts, as it did for much of the developed world in 2007–2012, for example, this debt accumulated over a 30-year period (1980–2007 peak) in the U.S. and much of the increase was mortgage-related.

Debt can sometimes be reduced by negotiation with creditors or by a legal bankruptcy process, which can result in dismissal of certain types of debt such as credit cards, some lenders may agree to write down mortgage values (reducing the homeowner's obligation) rather than taking even larger losses in foreclosure.[20] Economist Joseph Stiglitz argued for a rapid bankruptcy process for homeowners, to allow debts to be written down.[21]

Economists Joseph Stiglitz and Mark Zandi both advocated significant mortgage refinancing or write-downs in August 2012, they explained that more than four million Americans lost their homes since the housing bubble began bursting in 2006. An additional 3.5 million homeowners are in the foreclosure process or are so delinquent on payments that they will be soon. Roughly 13.5 million homeowners are underwater (in negative equity), meaning they owe more than their home is now worth, increasing the odds that millions more will lose their homes. The household debt and foreclosures are significantly holding back the economy.[22]

Economists Kenneth S. Rogoff and Carmen M. Reinhart wrote in April 2013: "In the United States, we support reducing mortgage principal on homes that are underwater (where the mortgage is higher than the value of the home). We have also written about plausible solutions that involve moderately higher inflation and “financial repression” — pushing down inflation-adjusted interest rates, which effectively amounts to a tax on bondholders, this strategy contributed to the significant debt reductions that followed World War II.[23]

Professor Luigi Gonzales (University of Chicago) advocated a mortgage debt for equity swap in July 2009, where the mortgage debt would be written down in exchange for the bank taking an interest in future appreciation of the home upon sale (a debt-for-equity swap).[24] Fund Manager John Hussman also advocated debt-for-equity swaps for households and banks during April 2009.[25]

Journalist Steven Clemons wrote in July 2012: "The Great Recession of 2008–2009, from which there are still repercussions in the US and global economies, resulted from a massive surge in consumer loans—98% in just five years—and ... the combined total of US business and consumer loans is basically at the same level as at the moment this crisis hit." He argued for debt forgiveness or restructuring to help stimulate the economy.[26][27]

If wages increase due to inflation, but debts remain fixed, the debts can be more easily repaid. Economists may advocate increasing inflation to help reduce the debt burden in highly leveraged economies, for example, economist Kenneth Rogoff has advocated both mortgage write-downs and inflation during August 2011: "I argued that the only practical way to shorten the coming period of painful deleveraging and slow growth would be a sustained burst of moderate inflation, say, 4–6% for several years. Of course, inflation is an unfair and arbitrary transfer of income from savers to debtors. But, at the end of the day, such a transfer is the most direct approach to faster recovery. Eventually, it will take place one way or another, anyway, as Europe is painfully learning." He also suggested that the government could take an equity interest in the homes in exchange for paying down the mortgages.[29]

While it is challenging to define over-indebtedness, definitions of over-indebtedness tend to have a few core elements in common, the first one refers to the capacity to meet the expenses associated with the contracted financial commitments. Over-indebtedness implies an inability to meet such recurring expenses. Second, this inability is structural, this is the time dimension, which holds that the definition must capture persistent and ongoing financial problems and exclude one-off occurrences that arise due to forgetfulness, for instance. The third core element refers to standard of living, the household must be unable to meet contracted commitments without reducing its minimum standard of living expenses. Fourth, comes illiquidity, the household is unable to remedy the situation by recourse to (financial and non-financial) assets and other financial sources such as credit. Lastly, all contracted financial commitments are included, among them mortgage and consumer credit commitments, utility and telephone bills as well as rent payments (recurring expenses).[30]

Causes of over-indebtedness can be diverse. A 'risky life event' (for example, unemployment, relationship break-up, leaving the parental home, business failure, illness or unexpected home repairs, such events can trigger income and expenditure shocks) can lie at the root, sometimes instantly turning indebtedness into over-indebtedness. Other households have unconsciously, or consciously, gradually become over-committed, they make use of available forms of credit, sometimes without realizing that they might not be able to repay in the future. Lack of financial management skills and aggressive marketing by lenders may both lie at the origin of this. Another potential cause includes escalating consumption habits, the third group of people are the least well-off. They need to obtain credit in order to attain a reasonable standard of living, they are frequently subject to relatively high interest rates. Potential consequences for the over-indebted household include financial hardship, depression, poor health, relationship breakdown, exclusion from basic financial services, a strain on social relations, absenteeism at work and lack of organizational commitment, a feeling of insecurity.[31]

Responses to household over-indebtedness can be preventive, alleviative and rehabilitative. Preventive measures include financial education and regulation. An example of the last is the European Union’s "Directive on Credit Agreements for Consumers Household debt advisory services", it stipulates, for example, that lenders should list the interest rates they change in a homogenized way (yearly rates) and that paper contracts should be signed for debts above a certain amounts, thus inhibiting for example impulsive borrowing through SMS-loans. Alleviative measures include debt advisory services, which aim to help households getting their finances back on track, mainly by means of information provision, budget planning and balancing, help with legal arrangements, negotiation with creditors, providing psychological support by having someone to talk to, and even by effectively, voluntarily taking over the managing of a household's finances. Rehabilitative measures include consumer bankruptcy and legal debt settlement procedures. While precise arrangements vary largely between countries, in general such procedures work as follows, during such procedures, the over-indebted household hands over all income above a minimum threshold to the creditors/state and is cleared of its debts after the period, varying in length from for example 1 year in the UK to 5 in Portugal and 12 in Ireland.[32]

Consumer debt
–
In economics, consumer debt is outstanding consumer debt, as opposed to that of businesses or governments. In macroeconomic terms, it is debt which is used to fund consumption rather than investment and it includes debts incurred on purchase of goods that are consumable and/or do not appreciate. Both domestic and international economists have suppo

Mortgage loan
–
The loan is secured on the borrowers property. Mortgage can also be described as a borrower giving consideration in the form of a collateral for a benefit, Mortgage borrowers can be individuals mortgaging their home or they can be businesses mortgaging commercial property. Features of mortgage loans such as the size of the loan, maturity of the loa

Subprime mortgage crisis
–
The United States subprime mortgage crisis was a nationwide banking emergency that contributed to the U. S. recession of December 2007 – June 2009. It was triggered by a decline in home prices after the collapse of a housing bubble, leading to mortgage delinquencies and foreclosures. Declines in residential investment preceded the recession and wer

1.
A mortgage brokerage in the US advertising subprime mortgages in July 2008.

Eurozone debt crisis
–
The European debt crisis is a multi-year debt crisis that has been taking place in the European Union since the end of 2009. The detailed causes of the debt crisis varied, in several countries, private debts arising from a property bubble were transferred to sovereign debt as a result of banking system bailouts and government responses to slowing e

1.
Total (gross) government debt around the world as a percent of GDP by IMF

2.
Long-term interest rates (secondary market yields of government bonds with maturities of close to ten years) of all eurozone countries except Estonia, Latvia and Lithuania. A yield being more than 4% points higher compared to the lowest comparable yield among the eurozone states, i.e. yields above 6% in September 2011, indicates that financial institutions have serious doubts about credit-worthiness of the state.

3.
100,000 people protest against the austerity measures in front of parliament building in Athens, 29 May 2011

4.
Standard & Poor's Headquarters in Lower Manhattan, New York City

Deleveraging
–
At the micro-economic level, deleveraging refers to the reduction of the leverage ratio, or the percentage of debt in the balance sheet of a single economic entity, such as a household or a firm. It is the opposite of leveraging, which is the practice of borrowing money to acquire assets and multiply gains, at the macro-economic level, deleveraging

1.
The leverage ratio, measured as debt divided by equity, for investment bank Goldman Sachs from 2003-2012. The lower the ratio, the greater the ability of the firm to withstand losses.

International Monetary Fund
–
The International Monetary Fund is an international organization headquartered in Washington, D. C. It now plays a role in the management of balance of payments difficulties. Countries contribute funds to a pool through a system from which countries experiencing balance of payments problems can borrow money. As of 2016, the fund had SDR477 billion,

4.
First page of the Articles of Agreement of the International Monetary Fund, 1 March 1946. Finnish Ministry of Foreign Affairs archives

Paul Krugman
–
Paul Robin Krugman is an American economist, Distinguished Professor of Economics at the Graduate Center of the City University of New York, and a columnist for The New York Times. In 2008, Krugman was awarded the Nobel Memorial Prize in Economic Sciences for his contributions to New Trade Theory, Krugman was a professor of economics at MIT and lat

Janet Yellen
–
Janet Louise Yellen is an American economist. She is the Chair of the Board of Governors of the Federal Reserve System, Yellen was nominated by President Obama to succeed Ben Bernanke as Chair of the United States Federal Reserve. On January 6,2014, the U. S. Senate confirmed Yellens nomination and she was sworn in on February 3,2014, making her th

Ezra Klein
–
Ezra Klein is a liberal / progressive American journalist, author, and political commentator. He is most known for his work as a blogger and columnist for The Washington Post, as well as his ongoing work as a contributor to Bloomberg News. He was formerly an editor of The American Prospect political magazine. At The Washington Post, he managed a br

1.
Klein in 2011

European sovereign-debt crisis
–
The European debt crisis is a multi-year debt crisis that has been taking place in the European Union since the end of 2009. The detailed causes of the debt crisis varied, in several countries, private debts arising from a property bubble were transferred to sovereign debt as a result of banking system bailouts and government responses to slowing e

1.
Total (gross) government debt around the world as a percent of GDP by IMF

2.
Long-term interest rates (secondary market yields of government bonds with maturities of close to ten years) of all eurozone countries except Estonia, Latvia and Lithuania. A yield being more than 4% points higher compared to the lowest comparable yield among the eurozone states, i.e. yields above 6% in September 2011, indicates that financial institutions have serious doubts about credit-worthiness of the state.

3.
100,000 people protest against the austerity measures in front of parliament building in Athens, 29 May 2011

4.
Standard & Poor's Headquarters in Lower Manhattan, New York City

Joseph Stiglitz
–
Joseph Eugene Stiglitz is an American economist and a professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences and he is a former senior vice president and chief economist of the World Bank and is a former member and chairman of the Council of Economic Advisers. In 2000, Stiglitz founded the Initiative fo

1.
Joseph Stiglitz

2.
Stiglitz at a conference in Mexico in 2009

3.
Stiglitz at the World Economic Forum Annual Meeting in Davos, 2009.

Mark Zandi
–
Mark Zandi is chief economist of Moodys Analytics, where he directs economic research. He is co-founder of Economy. com, which was acquired by Moodys Analytics in 2005, prior to founding Economy. com, Zandi was a regional economist at Chase Econometrics. Zandi’s broad research interests encompass macroeconomics, financial markets and public policy

1.
Mark zandi

Kenneth S. Rogoff
–
Kenneth Saul Ken Rogoff is an American economist and chess Grandmaster. He is the Thomas D. Cabot Professor of Public Policy, Rogoff grew up in Rochester, New York. His father was a Professor of Radiology at the University of Rochester, Rogoff received a BA and MA from Yale University summa cum laude in 1975, and a PhD in Economics from the Massach

1.
Kenneth Rogoff

Carmen M. Reinhart
–
Carmen M. Reinhart is the Minos A. Zombanakis Professor of the International Financial System at Harvard Kennedy School. Previously, she was the Dennis Weatherstone Senior Fellow at the Peterson Institute for International Economics, and Professor of Economics and Director of the Center for International Economics at the University of Maryland. She

1.
Carmen Reinhart

Steven Clemons
–
Steven Craig Clemons is an American journalist and blogger. He was appointed Washington editor-at-large of The Atlantic and editor-in-chief of AtlanticLIVE, Clemons also serves as editor-at-large of Quartz, a digital financial publication owned by Atlantic Media. Clemons also publishes the blog, The Washington Note. He is a staff member of Senator

Great Depression
–
The Great Depression was a severe worldwide economic depression that took place during the 1930s. The timing of the Great Depression varied across nations, in most countries it started in 1929 and it was the longest, deepest, and most widespread depression of the 20th century. In the 21st century, the Great Depression is commonly used as an example

Home Owners Loan Corporation
–
The Home Owners Loan Corporation was a government-sponsored corporation created as part of the New Deal. The corporation was established in 1933 by the Home Owners Loan Corporation Act under the leadership of President Franklin D. Roosevelt and its purpose was to refinance home mortgages currently in default to prevent foreclosure. The HOLC issued

1.
The former federal headquarters of the Home Owners' Loan Corporation

Kenneth Rogoff
–
Kenneth Saul Ken Rogoff is an American economist and chess Grandmaster. He is the Thomas D. Cabot Professor of Public Policy, Rogoff grew up in Rochester, New York. His father was a Professor of Radiology at the University of Rochester, Rogoff received a BA and MA from Yale University summa cum laude in 1975, and a PhD in Economics from the Massach

1.
Kenneth Rogoff

International Standard Book Number
–
The International Standard Book Number is a unique numeric commercial book identifier. An ISBN is assigned to each edition and variation of a book, for example, an e-book, a paperback and a hardcover edition of the same book would each have a different ISBN. The ISBN is 13 digits long if assigned on or after 1 January 2007, the method of assigning

1.
A 13-digit ISBN, 978-3-16-148410-0, as represented by an EAN-13 bar code

LIST OF IMAGES

1.
Consumer debt
–
In economics, consumer debt is outstanding consumer debt, as opposed to that of businesses or governments. In macroeconomic terms, it is debt which is used to fund consumption rather than investment and it includes debts incurred on purchase of goods that are consumable and/or do not appreciate. Both domestic and international economists have supported a recent upsurge in South Korean consumer debt, on the other hand, credit card debt is almost unknown just across the sea in Japan and China, because of long-standing cultural taboos against personal debt. Theoretical underpinnings aside, personal debt is on the rise, particularly in the United States, however, according to the US Federal Reserve, the US household debt service ratio is at the lowest level since its peak in the Fall of 2007. The most common forms of debt are credit card debt, payday loans, and other consumer finance. The amount of debt outstanding versus the consumers disposable income is expressed as the consumer leverage ratio, on a monthly basis, this debt ratio is advised to be no more than 20 percent of an individuals take-home pay. Rates generally range from 0.25 percent above base-rate, to well into double figures, consumer debt is also associated with Predatory lending, although there is much debate as to what exactly constitutes predatory lending. Long-term consumer debt is often considered fiscally suboptimal, while some consumer items may be useful investments that justify debt, most consumer goods are not. On the other hand, personal finance advisers like Robert Kiyosaki encourage a liberal attitude towards taking on debt if it can be leveraged into a small business or real estate. In many countries, the ease with which individuals can accumulate consumer debt beyond their means to repay has precipitated an industry in debt consolidation

Consumer debt

2.
Mortgage loan
–
The loan is secured on the borrowers property. Mortgage can also be described as a borrower giving consideration in the form of a collateral for a benefit, Mortgage borrowers can be individuals mortgaging their home or they can be businesses mortgaging commercial property. Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, in many jurisdictions, it is normal for home purchases to be funded by a mortgage loan. Few individuals have enough savings or liquid funds to them to purchase property outright. In countries where the demand for ownership is highest, strong domestic markets for mortgages have developed. According to Anglo-American property law, a mortgage occurs when an owner pledges his or her interest as security or collateral for a loan. As with other types of loans, mortgages have an interest rate and are scheduled to amortize over a set period of time, typically 30 years. All types of property can be, and usually are, secured with a mortgage. Mortgage lending is the mechanism used in many countries to finance private ownership of residential and commercial property. Although the terminology and precise forms will differ from country to country, the components tend to be similar, Property. The exact form of ownership will vary from country to country, Mortgage, the security interest of the lender in the property, which may entail restrictions on the use or disposal of the property. Restrictions may include requirements to purchase insurance and mortgage insurance. Borrower, the person borrowing who either has or is creating an ownership interest in the property, lender, any lender, but usually a bank or other financial institution. Principal, the size of the loan, which may or may not include certain other costs, as any principal is repaid. Interest, a charge for use of the lenders money. Completion, legal completion of the deed, and hence the start of the mortgage. A closed mortgage account is said to be redeemed, many other specific characteristics are common to many markets, but the above are the essential features. Governments usually regulate many aspects of mortgage lending, either directly or indirectly, other aspects that define a specific mortgage market may be regional, historical, or driven by specific characteristics of the legal or financial system

Mortgage loan

3.
Subprime mortgage crisis
–
The United States subprime mortgage crisis was a nationwide banking emergency that contributed to the U. S. recession of December 2007 – June 2009. It was triggered by a decline in home prices after the collapse of a housing bubble, leading to mortgage delinquencies and foreclosures. Declines in residential investment preceded the recession and were followed by reductions in household spending, spending reductions were more significant in areas with a combination of high household debt and larger housing price declines. A proximate cause was the rise in subprime lending. S, a high percentage of these subprime mortgages, over 90% in 2006 for example, were adjustable-rate mortgages. These two changes were part of a trend of lowered lending standards and higher-risk mortgage products. When U. S. home prices declined steeply after peaking in mid-2006, as adjustable-rate mortgages began to reset at higher interest rates, mortgage delinquencies soared. Securities backed with mortgages, including mortgages, widely held by financial firms globally. Concerns about the soundness of U. S. credit and financial markets led to tightening credit around the world and slowing growth in the U. S. The crisis had severe, long-lasting consequences for the U. S. the U. S. entered a deep recession, with nearly 9 million jobs lost during 2008 and 2009, roughly 6% of the workforce. One estimate of lost output from the crisis comes to at least 40% of 2007 gross domestic product, U. S. housing prices fell nearly 30% on average and the U. S. stock market fell approximately 50% by early 2009. As of early 2013, the U. S. stock market had recovered to its pre-crisis peak, Economic growth remained below pre-crisis levels. Europe also continued to struggle with its own crisis, with elevated unemployment. The immediate cause or trigger of the crisis was the bursting of the United States housing bubble which peaked in approximately 2005–2006. However, once interest rates began to rise and housing prices started to drop moderately in 2006–2007 in many parts of the U. S. borrowers were unable to refinance. Defaults and foreclosure activity increased dramatically as easy initial terms expired, home prices fell, as housing prices fell, global investor demand for mortgage-related securities evaporated. This became apparent by July 2007, when investment bank Bear Stearns announced that two of its hedge funds had imploded and these funds had invested in securities that derived their value from mortgages. When the value of these securities dropped, investors demanded that these hedge funds provide additional collateral and this created a cascade of selling in these securities, which lowered their value further. Economist Mark Zandi wrote that this 2007 event was arguably the proximate catalyst for the market disruption that followed

4.
Eurozone debt crisis
–
The European debt crisis is a multi-year debt crisis that has been taking place in the European Union since the end of 2009. The detailed causes of the debt crisis varied, in several countries, private debts arising from a property bubble were transferred to sovereign debt as a result of banking system bailouts and government responses to slowing economies post-bubble. The structure of the eurozone as a union without fiscal union contributed to the crisis. European banks own a significant amount of debt, such that concerns regarding the solvency of banking systems or sovereigns are negatively reinforcing. The ECB also contributed to solve the crisis by lowering interest rates, return to economic growth and improved structural deficits enabled Ireland and Portugal to exit their bailout programmes in July 2014. Greece and Cyprus both managed to regain market access in 2014. Spain never officially received a bailout programme and its rescue package from the ESM was earmarked for a bank recapitalization fund and did not include financial support for the government itself. In 1992, members of the European Union signed the Maastricht Treaty, under which they pledged to limit their deficit spending and debt levels. The crisis subsequently spread to Ireland and Portugal, while raising concerns about Italy, Spain, and the European banking system, in Greece, the low forecast was reported until very late in the year, clearly not corresponding to the actual situation. The fact that the Greek debt exceeded $400 billion and France owned 10% of that debt, as of January 2009, a group of 10 central and eastern European banks had already asked for a bailout. At the time, the European Commission released a forecast of a 1. 8% decline in EU economic output for 2009, the many public funded bank recapitalizations were one reason behind the sharply deteriorated debt-to-GDP ratios experienced by several European governments in the wake of the Great Recession. The states that were affected by the crisis faced a strong rise in interest rate spreads for government bonds as a result of investor concerns about their future debt sustainability. Together these three international organisations representing the creditors became nicknamed the Troika. By the end of 2011, Germany was estimated to have more than €9 billion out of the crisis as investors flocked to safer. By July 2012 also the Netherlands, Austria, and Finland benefited from zero or negative interest rates, looking at short-term government bonds with a maturity of less than one year the list of beneficiaries also includes Belgium and France. While Switzerland equally benefited from lower interest rates, the crisis also harmed its export sector due to an influx of foreign capital. This is the biggest Swiss intervention since 1978, in total, the debt crisis forced five out of 17 eurozone countries to seek help from other nations by the end of 2012. This has also greatly diminished contagion risk for other eurozone countries, as of October 2012 only 3 out of 17 eurozone countries, namely Greece, Portugal, and Cyprus still battled with long-term interest rates above 6%

Eurozone debt crisis
–
Total (gross) government debt around the world as a percent of GDP by IMF
Eurozone debt crisis
–
Long-term interest rates (secondary market yields of government bonds with maturities of close to ten years) of all eurozone countries except Estonia, Latvia and Lithuania. A yield being more than 4% points higher compared to the lowest comparable yield among the eurozone states, i.e. yields above 6% in September 2011, indicates that financial institutions have serious doubts about credit-worthiness of the state.
Eurozone debt crisis
–
100,000 people protest against the austerity measures in front of parliament building in Athens, 29 May 2011
Eurozone debt crisis
–
Standard & Poor's Headquarters in Lower Manhattan, New York City

5.
Deleveraging
–
At the micro-economic level, deleveraging refers to the reduction of the leverage ratio, or the percentage of debt in the balance sheet of a single economic entity, such as a household or a firm. It is the opposite of leveraging, which is the practice of borrowing money to acquire assets and multiply gains, at the macro-economic level, deleveraging of an economy refers to the simultaneous reduction of debt levels in multiple sectors, including private sectors and the government sector. It is usually measured as a decline of the debt to GDP ratio in the national account. The deleveraging of a following an financial crisis has significant macro-economic consequences and is often associated with severe recessions. While leverage allows a borrower to acquire assets and multiply gains in good times, during a market downturn when the value of assets and income plummets, a highly leveraged borrower faces heavy losses due to his or her obligation to the service of high levels of debt. If the value of assets falls below the value of debt, deleveraging reduces the total amplification of market volatility on the borrowers balance sheet. It means giving up potential gains in good times, in exchange for lower risk of heavy loss, however, precaution is not the most common reason for deleveraging. In the last case, lenders lower the leverage offered by asking for a level of collateral. It is estimated that from 2006 to 2008, the average down payment required for a buyer in the US increased from 5% to 25%. To deleverage, one needs to raise cash to pay debt, deleveraging is frustrating and painful for private sector entities in distress, selling assets at a discount can itself lead to heavy losses. In addition, dysfunctional security and credit markets make it difficult to raise capital from public market and these factors can all contribute to hindering the sources of private capital and the effort of deleveraging. Deleveraging of an economy refers to the reduction of leverage level in multiple private and public sectors. Almost every major crisis in modern history has been followed by a significant period of deleveraging. Moreover, the process of deleveraging usually begins a few years after the start of the financial crisis and this is mainly because the continuing rising of government debt, due to the Great Recession, has been offsetting the deleveraging in the private sectors in many countries. After the 2008 financial crisis, economists expected deleveraging to occur globally, instead the total debt in all nations combined increased by $57 trillion from 2007 to 2015 and government debt increased by $25 trillion. According to the McKinsey Global Institute, from 2007 to 2015, five developing nations, as of 2015, the ratio of debt to gross domestic product globally is 17 percent. According to a McKinsey Global Institute report, there are four archetypes of deleveraging processes, “Belt-tightening”, in order to increase net savings, an economy reduces spending and goes through a prolonged period of austerity. “High inflation”, high inflation mechanically increases nominal GDP growth, thus reducing the debt to GDP ratio, “Massive default”, this usually comes after a severe currency crisis

Deleveraging
–
The leverage ratio, measured as debt divided by equity, for investment bank Goldman Sachs from 2003-2012. The lower the ratio, the greater the ability of the firm to withstand losses.

6.
International Monetary Fund
–
The International Monetary Fund is an international organization headquartered in Washington, D. C. It now plays a role in the management of balance of payments difficulties. Countries contribute funds to a pool through a system from which countries experiencing balance of payments problems can borrow money. As of 2016, the fund had SDR477 billion, the rationale for this is that private international capital markets function imperfectly and many countries have limited access to financial markets. The IMF provides alternate sources of financing and this assistance was meant to prevent the spread of international economic crises. The IMF was also intended to help mend the pieces of the economy after the Great Depression. As well, to provide investments for economic growth and projects such as infrastructure. The IMFs role was altered by the floating exchange rates post-1971. It shifted to examining the economic policies of countries with IMF loan agreements to determine if a shortage of capital was due to economic fluctuations or economic policy, the IMF also researched what types of government policy would ensure economic recovery. Rather than maintaining a position of oversight of only exchange rates and their role became a lot more active because the IMF now manages economic policy rather than just exchange rates. In addition, the IMF negotiates conditions on lending and loans under their policy of conditionality, nonconcessional loans, which include interest rates, are provided mainly through Stand-By Arrangements, the Flexible Credit Line, the Precautionary and Liquidity Line, and the Extended Fund Facility. The IMF provides emergency assistance via the Rapid Financing Instrument to members facing urgent balance-of-payments needs, the IMF is mandated to oversee the international monetary and financial system and monitor the economic and financial policies of its member countries. This activity is known as surveillance and facilitates international cooperation, the responsibilities changed from those of guardian to those of overseer of members’ policies. In 1995 the International Monetary Fund began work on data dissemination standards with the view of guiding IMF member countries to disseminate their economic and financial data to the public. The executive board approved the SDDS and GDDS in 1996 and 1997 respectively, the system is aimed primarily at statisticians and aims to improve many aspects of statistical systems in a country. It is also part of the World Bank Millennium Development Goals, some countries initially used the GDDS, but later upgraded to SDDS. The IMF does require collateral from countries for loans but also requires the government seeking assistance to correct its macroeconomic imbalances in the form of policy reform, if the conditions are not met, the funds are withheld. The concept of conditionality was introduced in a 1952 Executive Board decision, conditionality is associated with economic theory as well as an enforcement mechanism for repayment

International Monetary Fund
–
IMF "Headquarters 1" in Washington, D.C.
International Monetary Fund
–
Coat of arms
International Monetary Fund
–
The Gold Room within the Mount Washington Hotel where the Bretton Woods Conference attendees signed the agreements creating the IMF and World Bank
International Monetary Fund
–
First page of the Articles of Agreement of the International Monetary Fund, 1 March 1946. Finnish Ministry of Foreign Affairs archives

7.
Paul Krugman
–
Paul Robin Krugman is an American economist, Distinguished Professor of Economics at the Graduate Center of the City University of New York, and a columnist for The New York Times. In 2008, Krugman was awarded the Nobel Memorial Prize in Economic Sciences for his contributions to New Trade Theory, Krugman was a professor of economics at MIT and later at Princeton University. He retired from Princeton in June 2015 and holds the title of professor emeritus there and he is also Centenary Professor at the London School of Economics and was President of the Eastern Economic Association in 2010. As of 2016, Research Papers in Economics ranked him as the worlds 24th most influential economist based on citations of his work, Krugman is known in academia for his work on international economics, liquidity traps, and currency crisis. He has also several hundred columns on economic and political issues for The New York Times, Fortune. A2011 survey of economics professors named him their favorite living economist under the age of 60, followed by Greg Mankiw, as a commentator, Krugman has written on a wide range of economic issues including income distribution, taxation, macroeconomics, and international economics. Krugman considers himself a liberal, referring to his books, his blog on The New York Times. His popular commentary has attracted comments, both positive and negative, Krugman was born to a Jewish family, the son of Anita and David Krugman. In 1922, his grandparents immigrated to the United States from Brest, Belarus. He was born in Albany, New York, and grew up in Merrick and he graduated from John F. Kennedy High School in Bellmore. Since present-day science fell far short of psychohistory, Krugman turned to economics as the next best thing and his first wife, Robin L. Bergman, is a designer. He is currently married to Robin Wells, an academic economist who has collaborated with Krugman on textbooks, Krugman reports that he is a distant relative of conservative journalist David Frum. He has described himself as a Loner and he lives in New York City. In 1978, Krugman presented a number of ideas to Dornbusch, encouraged, Krugman worked on it and later wrote, knew within a few hours that I had the key to my whole career in hand. In that same year, Krugman wrote The Theory of Interstellar Trade and he says he wrote it to cheer himself up when he was an oppressed assistant professor. Krugman joined the faculty of MIT in 1979, from 1982 to 1983, Krugman spent a year working at the Reagan White House as a staff member of the Council of Economic Advisers. He rejoined MIT as a professor in 1984. Krugman has also taught at Stanford, Yale, and the London School of Economics, in 2000, Krugman joined Princeton University as Professor of Economics and International Affairs

8.
Janet Yellen
–
Janet Louise Yellen is an American economist. She is the Chair of the Board of Governors of the Federal Reserve System, Yellen was nominated by President Obama to succeed Ben Bernanke as Chair of the United States Federal Reserve. On January 6,2014, the U. S. Senate confirmed Yellens nomination and she was sworn in on February 3,2014, making her the first woman to hold the position. Yellen was born to a Jewish family in Brooklyn, New York, the daughter of Anna and Julius Yellen and her fathers family originally came from the Polish town of Suwałki. She graduated from Fort Hamilton High School in the Bay Ridge section of Brooklyn and she graduated summa cum laude from Pembroke College in Brown University with a degree in economics in 1967. At Brown, Yellen had switched her major from philosophy to economics and was particularly influenced by professors George Borts. She received her Ph. D. in economics from Yale University in 1971, two dozen economists earned their Ph. D from Yale in 1971, but Yellen was the only woman in that doctoral class. Yellen is married to George Akerlof, a Nobel prize-winning economist, professor at Georgetown University and their son, Robert Akerlof, teaches Economics at the University of Warwick. Beginning in 1980, Yellen conducted research at the Haas School and taught macroeconomics to full-time and part-time MBA, twice she has been awarded the Haas Schools outstanding teaching award. Yellen serves as president of the Western Economic Association International and is a vice president of the American Economic Association. She was a fellow of the Yale Corporation, from June 14,2004, until 2010, Yellen was the President and Chief Executive Officer of the Federal Reserve Bank of San Francisco. She was a member of the Federal Open Market Committee in 2009. However, Yellen did not lead the San Francisco Fed to move to check increasingly indiscriminate lending of Countrywide Financial, in July 2009, Yellen was mentioned as a potential successor to Ben Bernanke as chair of the Federal Reserve System, before he was renominated by Barack Obama. On April 28,2010, President Obama nominated Yellen to succeed Donald Kohn as vice-chair of the Federal Reserve System, in July, the Senate Banking Committee voted 17 to 6 to confirm her, though the top Republican on the panel, Senator Richard C. Shelby of Alabama, voted no, saying he believed Yellen had an inflationary bias, at the same time, on the heels of related testimony by Fed Chairman Bernanke, FOMC voting member James B. Bullard of the St. Louis Fed made a statement that the U. S. economy was at risk of becoming enmeshed in a Japanese-style deflationary outcome within the several years. Bullards statement was interpreted as a shift within the FOMC balance between inflation hawks and doves. Yellens pending confirmation, along with those of Peter A, diamond and Sarah Bloom Raskin to fill vacancies, was seen as possibly furthering such a shift in the FOMC

9.
Ezra Klein
–
Ezra Klein is a liberal / progressive American journalist, author, and political commentator. He is most known for his work as a blogger and columnist for The Washington Post, as well as his ongoing work as a contributor to Bloomberg News. He was formerly an editor of The American Prospect political magazine. At The Washington Post, he managed a branded blog called Wonkblog, which featured his writing, issues discussed in the blog included Health Care and Budget Policy. He wrote a primer on policy called Wonkbook, which was delivered by e-mail, in 2011, Kleins blog was the most-read blog at The Washington Post. In January 2014, he announced he would be leaving The Washington Post to start a new venture with several other veteran journalists. He has joined Vox Media as Editor in-Chief for their news website, Vox. Klein was born and raised in Irvine, Klein is a middle child, raised in a Jewish family. His father is a mathematics professor originally from Brazil, his mother is an artist, Klein went to school at University High School. He attended the University of California, Santa Cruz, but later transferred to the University of California, Los Angeles, while at UCSC, he applied to write for the City on a Hill Press but was rejected. Klein worked on Howard Deans primary campaign in Vermont in 2003, the media is as effective and important an agent for change as the legislative bodies, and I think its where Im happiest and most effective, Klein said. In 2003, he and Markos Moulitsas were two of the earliest bloggers to report from a convention, that of the California State Democratic Party. In 2006, Klein was one of several writers pseudonymously flamed by The New Republic writer Lee Siegel, on December 10,2007, Klein moved his blog full-time to the American Prospect. Kleins prolific blogging caught the attention of Steve Pearlstein, the Washington Posts veteran business columnist, I was blown away by how good he was—how much the kid wrote—on so many subjects, Pearlstein said. Pearlstein sent samples of Kleins work to managing editor Raju Narisetti, a few weeks after he heard from Pearlstein, Post foreign correspondent John Pomfret asked Klein to have lunch with him and financial editor Sandy Sugawara. Narisetti quickly hired Klein to be the Post’s first pure blogger on politics and economics, on May 18,2009, he began writing at the newspaper. In May 2011 when Bloomberg View launched, Klein became a columnist there in addition to his work at The Washington Post, Klein announced he would be leaving the Washington Post in January 2014, with the intent to start a new media venture with several other veteran journalists. The new media venture was soon identified as Vox Media, which hired Klein, during negotiations, Post publisher Katharine Weymouth and new owner Jeff Bezos did not make a counteroffer. Klein is currently editor in chief at Vox, and formerly wrote for and he frequently provides political commentary on MSNBCs The Rachel Maddow Show, Hardball with Chris Matthews, and The Last Word with Lawrence ODonnell

Ezra Klein
–
Klein in 2011

10.
European sovereign-debt crisis
–
The European debt crisis is a multi-year debt crisis that has been taking place in the European Union since the end of 2009. The detailed causes of the debt crisis varied, in several countries, private debts arising from a property bubble were transferred to sovereign debt as a result of banking system bailouts and government responses to slowing economies post-bubble. The structure of the eurozone as a union without fiscal union contributed to the crisis. European banks own a significant amount of debt, such that concerns regarding the solvency of banking systems or sovereigns are negatively reinforcing. The ECB also contributed to solve the crisis by lowering interest rates, return to economic growth and improved structural deficits enabled Ireland and Portugal to exit their bailout programmes in July 2014. Greece and Cyprus both managed to regain market access in 2014. Spain never officially received a bailout programme and its rescue package from the ESM was earmarked for a bank recapitalization fund and did not include financial support for the government itself. In 1992, members of the European Union signed the Maastricht Treaty, under which they pledged to limit their deficit spending and debt levels. The crisis subsequently spread to Ireland and Portugal, while raising concerns about Italy, Spain, and the European banking system, in Greece, the low forecast was reported until very late in the year, clearly not corresponding to the actual situation. The fact that the Greek debt exceeded $400 billion and France owned 10% of that debt, as of January 2009, a group of 10 central and eastern European banks had already asked for a bailout. At the time, the European Commission released a forecast of a 1. 8% decline in EU economic output for 2009, the many public funded bank recapitalizations were one reason behind the sharply deteriorated debt-to-GDP ratios experienced by several European governments in the wake of the Great Recession. The states that were affected by the crisis faced a strong rise in interest rate spreads for government bonds as a result of investor concerns about their future debt sustainability. Together these three international organisations representing the creditors became nicknamed the Troika. By the end of 2011, Germany was estimated to have more than €9 billion out of the crisis as investors flocked to safer. By July 2012 also the Netherlands, Austria, and Finland benefited from zero or negative interest rates, looking at short-term government bonds with a maturity of less than one year the list of beneficiaries also includes Belgium and France. While Switzerland equally benefited from lower interest rates, the crisis also harmed its export sector due to an influx of foreign capital. This is the biggest Swiss intervention since 1978, in total, the debt crisis forced five out of 17 eurozone countries to seek help from other nations by the end of 2012. This has also greatly diminished contagion risk for other eurozone countries, as of October 2012 only 3 out of 17 eurozone countries, namely Greece, Portugal, and Cyprus still battled with long-term interest rates above 6%

European sovereign-debt crisis
–
Total (gross) government debt around the world as a percent of GDP by IMF
European sovereign-debt crisis
–
Long-term interest rates (secondary market yields of government bonds with maturities of close to ten years) of all eurozone countries except Estonia, Latvia and Lithuania. A yield being more than 4% points higher compared to the lowest comparable yield among the eurozone states, i.e. yields above 6% in September 2011, indicates that financial institutions have serious doubts about credit-worthiness of the state.
European sovereign-debt crisis
–
100,000 people protest against the austerity measures in front of parliament building in Athens, 29 May 2011
European sovereign-debt crisis
–
Standard & Poor's Headquarters in Lower Manhattan, New York City

11.
Joseph Stiglitz
–
Joseph Eugene Stiglitz is an American economist and a professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences and he is a former senior vice president and chief economist of the World Bank and is a former member and chairman of the Council of Economic Advisers. In 2000, Stiglitz founded the Initiative for Policy Dialogue, a tank on international development based at Columbia University. He has been a member of the Columbia faculty since 2001 and he was the founding chair of the universitys Committee on Global Thought. He also chairs the University of Manchesters Brooks World Poverty Institute and he is a member of the Pontifical Academy of Social Sciences. In 2009, the President of the United Nations General Assembly Miguel dEscoto Brockmann, Commission on Reforms of the International Monetary and Financial System, where he oversaw suggested proposals and commissioned a report on reforming the international monetary and financial system. From 2011 to 2014, Stiglitz was president of the International Economic Association and he presided over the organization of the IEA triennial world congress held near the Dead Sea in Jordan in June 2014. Based on academic citations, Stiglitz is the 4th most influential economist in the world today, Stiglitzs work focuses on income distribution from a Georgist perspective, asset risk management, corporate governance, and international trade. Stiglitz was born in a Jewish family in Gary, Indiana, to Charlotte, a schoolteacher, and Nathaniel David Stiglitz, Stiglitz graduated from Amherst College in 1964, where he was a highly active member of the debate team and president of the student government. During his senior year at Amherst College, he studied at the Massachusetts Institute of Technology, from 1965 to 1966, he moved to the University of Chicago to do research under Hirofumi Uzawa who had received an NSF grant. He studied for his PhD from MIT from 1966 to 1967, Stiglitz stated that the particular style of MIT economics suited him well – simple and concrete models, directed at answering important and relevant questions. In subsequent years, he held positions at Yale, Stanford, Oxford. He also gives classes for a program between Sciences Po Paris and École Polytechnique in Economics and Public Policy. He has chaired The Brooks World Poverty Institute at the University of Manchester since 2005, Stiglitz is widely considered a New-Keynesian economist, although at least one economics journalist says his work cannot be so clearly categorised. In addition to making numerous contributions to microeconomics, Stiglitz has played a number of policy roles. He served in the Clinton administration as the chair of the Presidents Council of Economic Advisors and he was fired by the World Bank for expressing dissent with its policies. He was an author for the Intergovernmental Panel on Climate Change. He is also a member of the committee of the Fundacion IDEAS

12.
Mark Zandi
–
Mark Zandi is chief economist of Moodys Analytics, where he directs economic research. He is co-founder of Economy. com, which was acquired by Moodys Analytics in 2005, prior to founding Economy. com, Zandi was a regional economist at Chase Econometrics. Zandi’s broad research interests encompass macroeconomics, financial markets and public policy and his recent research has focused on mortgage finance reform and the determinants of mortgage foreclosure and personal bankruptcy. He has analyzed the impact of various tax and government spending policies. He has been a guest on CNBC, NPR, Meet the Press, CNN, Zandi is also a regular op-ed contributor to The Washington Post and The Philadelphia Inquirer. Mark Zandi was born in Atlanta, Georgia, and is of Iranian descent, the son of Professor Iraj Zandi, he grew up in Radnor, Pennsylvania. His surname of Zandi comes from the Zand dynasty, which ruled southern, Zandi received B. S. in economics from The Wharton School of the University of Pennsylvania and a Ph. D. in economics from the University of Pennsylvania. com Economy

Mark Zandi
–
Mark zandi

13.
Kenneth S. Rogoff
–
Kenneth Saul Ken Rogoff is an American economist and chess Grandmaster. He is the Thomas D. Cabot Professor of Public Policy, Rogoff grew up in Rochester, New York. His father was a Professor of Radiology at the University of Rochester, Rogoff received a BA and MA from Yale University summa cum laude in 1975, and a PhD in Economics from the Massachusetts Institute of Technology in 1980. At sixteen Rogoff dropped out of school to concentrate on chess. He won the United States Junior Championship in 1969 and spent the several years living primarily in Europe. Rogoff was awarded the IM title in 1974, and the GM title in 1978, in other tournaments, he drew for first at Norristown in 1973 and at Orense in 1976. He has also drawn individual games against former world champions Mikhail Tal, in 2012 he drew a blitz game with the worlds highest rated player Magnus Carlsen. Early in his career, Rogoff served as an economist at the International Monetary Fund, Rogoff was the Charles and Marie Robertson Professor of International Affairs at Princeton University. In 2002, Rogoff was in the spotlight because of a dispute with Joseph Stiglitz, after Stiglitz criticized the IMF in his book, Globalization and Its Discontents, Rogoff replied in an open letter. Their calculations demonstrated that high debt countries grew at 2.2 percent, rather than the −0.1 percent figure initially cited by Reinhart, Rogoff and Reinhart claimed that their fundamental conclusions were accurate after correcting the coding errors detected by their critics. They disavowed their claim that a 90% government debt-to-GDP ratio is a tipping point for growth outcomes. The subject remains controversial, because of the ramifications of the research, though in Rogoff. Has falsely equated our finding of an association between debt and growth with an unambiguous call for austerity. Rogoff refused to comment on a recent article in the Harvard Crimson about the use of marijuana at Harvard despite writing a book on the black markets. 2004, Council on Foreign Relations Economic Advisory Panel of the Federal Reserve. National Academy of SciencesAmerican Academy of Arts and Sciences 2008, Group of Thirty. This Time is Different, An Interview with Kenneth Rogoff at the Wayback Machine, Nicholas Rugoff, The Politic, May 1,2010 Open Letter to Joseph Stiglitz

Kenneth S. Rogoff
–
Kenneth Rogoff

14.
Carmen M. Reinhart
–
Carmen M. Reinhart is the Minos A. Zombanakis Professor of the International Financial System at Harvard Kennedy School. Previously, she was the Dennis Weatherstone Senior Fellow at the Peterson Institute for International Economics, and Professor of Economics and Director of the Center for International Economics at the University of Maryland. She is also member of American Economic Association, Latin American and Caribbean Economic Association, and she became the subject of general news coverage when mathematical errors were found in a research paper she co-authored. Born in Havana, Cuba, Reinhart arrived in the United States on January 6,1966, with her mother and father and they settled in Pasadena, California, during the early years before moving to South Florida, where she grew up. When the family moved to Miami, Reinhart started college at two-year Miami Dade College, before transferring to Florida International University, recommended by Peter Montiel, an M. I. T. Graduate teaching at FIU, Reinhart in 1978 went on to attend Columbia University graduate school, after Reinhart passed her field examinations, she was hired as an economist by Bear Stearns and rose to the investment banks chief economist three years later. In 1988 she returned to Columbia to obtain her Ph. D. under the supervision of Robert Mundell, in the 1990s, she held several positions in the International Monetary Fund. From 2001 to 2003 she returned to the International Monetary Fund as deputy director at the Research Department and she has been the Minos A. Zombanakis Professor of the International Financial System at Harvard Kennedy School since 2012. She has served on the boards of The American Economic Review. In both 2011 and 2012 she was included in the 50 Most Influential ranking of Bloomberg Markets and her work has been published in scholarly journals such as The American Economic Review, the Journal of Political Economy, the Quarterly Journal of Economics, and the Journal of Economic Perspectives. Her work is featured in the press, including The Economist, Newsweek, The Washington Post. Her book, This Time is Different, Eight Centuries of Financial Folly, studied the similarities of the recurring booms. A separate and previous criticism is that the correlation between debt and growth need not be causal. Rogoff and Reinhart claimed that their conclusions were accurate, despite the errors. Reinhart met her husband, Vincent Reinhart, when they were classmates at Columbia University in the late 1970s. Growth in a Time of Debt, graciela L. Kaminsky and Carmen Reinhart. The Twin Crises, The Causes of Banking and Balance-of-Payments Problems and this Time is Different, Eight Centuries of Financial Folly. Carmen M. Reinharts homepage at the Peterson Institute for International Economics Roberts, Russ

Carmen M. Reinhart
–
Carmen Reinhart

15.
Steven Clemons
–
Steven Craig Clemons is an American journalist and blogger. He was appointed Washington editor-at-large of The Atlantic and editor-in-chief of AtlanticLIVE, Clemons also serves as editor-at-large of Quartz, a digital financial publication owned by Atlantic Media. Clemons also publishes the blog, The Washington Note. He is a staff member of Senator Jeff Bingaman. The New America Foundation has been described as radical centrist in orientation and he has also served on the advisory board to the Center for U. S. -Japan Relations at the RAND Corporation. Earlier in his career, Clemons was the director of the Japan America Society of Southern California from 1987 to 1994. In 1993, Clemons was the advisor for the film Rising Sun. Clemons also had a role as a show host. He also had a role in the film State of Play, Clemons also serves on the Board of Advisors of the C. V. Starr Center for the Study of the American Experience at Washington College in Chestertown, Maryland, Clemons is perhaps best known for his blog The Washington Note, a blog that focuses on foreign policy issues, as well as general US policy debates. In 2010, TIME Magazine selected Clemons blog as one of TIMEs Best Blogs of the year and his articles have appeared in blogs such as The Huffington Post, and Daily Kos, as well as major publications around the country. Clemons at the Internet Movie Database thewashingtonnote. com - Clemons main blog Profile at New America Foundation Appearances on C-SPAN

Steven Clemons
–
Steven Clemons at the World Economic Forum Annual Meeting of the New Champions in 2010

16.
Great Depression
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The Great Depression was a severe worldwide economic depression that took place during the 1930s. The timing of the Great Depression varied across nations, in most countries it started in 1929 and it was the longest, deepest, and most widespread depression of the 20th century. In the 21st century, the Great Depression is commonly used as an example of how far the economy can decline. The depression originated in the United States, after a fall in stock prices that began around September 4,1929. Between 1929 and 1932, worldwide GDP fell by an estimated 15%, by comparison, worldwide GDP fell by less than 1% from 2008 to 2009 during the Great Recession. Some economies started to recover by the mid-1930s, however, in many countries, the negative effects of the Great Depression lasted until the beginning of World War II. The Great Depression had devastating effects in both rich and poor. Personal income, tax revenue, profits and prices dropped, while international trade plunged by more than 50%, unemployment in the U. S. rose to 25% and in some countries rose as high as 33%. Cities all around the world were hit hard, especially dependent on heavy industry. Construction was virtually halted in many countries, farming communities and rural areas suffered as crop prices fell by about 60%. Facing plummeting demand with few sources of jobs, areas dependent on primary sector industries such as mining and logging suffered the most. Even after the Wall Street Crash of 1929 optimism persisted for some time, john D. Rockefeller said These are days when many are discouraged. In the 93 years of my life, depressions have come, prosperity has always returned and will again. The stock market turned upward in early 1930, returning to early 1929 levels by April and this was still almost 30% below the peak of September 1929. Together, government and business spent more in the first half of 1930 than in the period of the previous year. On the other hand, consumers, many of whom had suffered losses in the stock market the previous year. In addition, beginning in the mid-1930s, a severe drought ravaged the agricultural heartland of the U. S, by mid-1930, interest rates had dropped to low levels, but expected deflation and the continuing reluctance of people to borrow meant that consumer spending and investment were depressed. By May 1930, automobile sales had declined to below the levels of 1928, prices in general began to decline, although wages held steady in 1930

17.
Home Owners Loan Corporation
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The Home Owners Loan Corporation was a government-sponsored corporation created as part of the New Deal. The corporation was established in 1933 by the Home Owners Loan Corporation Act under the leadership of President Franklin D. Roosevelt and its purpose was to refinance home mortgages currently in default to prevent foreclosure. The HOLC issued bonds and then used the bonds to purchase loans from lenders. The loans purchased were for homeowners who were having problems making the payments on their loans through no fault of their own. The HOLC then refinanced the loans for the borrowers and this value of the loan was then the amount of the loan that was refinanced for the borrower. The borrower gained because he or she was offered a loan with a time frame at a lower interest rate. It was rare to reduce the amount of principal owed, the typical HOLC loan before 1939 was an amortized 15-year loan, compared with the 3-6 year mortgages offered by commercial banks and the 10-12 year loans offered by Building and Loans in the 1920s. The interest rate on the original HOLC loans was 5 percent at a time when most mortgage loans were being offered at an interest rate of 6 to 8 percent, in 1939 the corporation lowered the interest rate to 4 1/2 percent for a large group of borrowers. The HOLC loans were typically amortizing, so there were equal payments each month on the loan. Until the early 1930s borrowers often paid the principal owed by taking out a new loan, when the economy fell apart in the 1930s it became very difficult to borrow and many borrowers could not repay the principal owed at the end of the loan. It also contrasts with loans at Building and Loans in the 1920s, the direct reduction loan has become the most common type of American mortgage. Between 1933 and 1935 the HOLC made slightly more than one million loans, at that point it stopped making new loans and then focused on the repayments of the loans. The typical borrower whose loan was refinanced by the HOLC was more than 2 years behind on payments of the loan, the HOLC eventually foreclosed on 20 percent of the loans that it refinanced. It tended to wait until the borrower had failed to make payments on the loan for more than a year before it foreclosed on the loan, when the HOLC foreclosed, it typically refurbished the home. In many cases it rented out the home until it could be resold, the HOLC tried to avoid selling too many homes quickly to avoid having negative effects on housing prices. Ultimately, more than 800,000 people repaid their HOLC loans, HOLC officially ceased operations in 1951, when its last assets were sold to private lenders. HOLC was only applicable to nonfarm homes, worth less than $20,000, HOLC also assisted mortgage lenders by refinancing problematic loans and increasing the institutions liquidity. When its last assets were sold in 1951, HOLC turned a small profit, HOLC is often cited as the originator of mortgage redlining, although, this claim has also been disputed

Home Owners Loan Corporation
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The former federal headquarters of the Home Owners' Loan Corporation

18.
Kenneth Rogoff
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Kenneth Saul Ken Rogoff is an American economist and chess Grandmaster. He is the Thomas D. Cabot Professor of Public Policy, Rogoff grew up in Rochester, New York. His father was a Professor of Radiology at the University of Rochester, Rogoff received a BA and MA from Yale University summa cum laude in 1975, and a PhD in Economics from the Massachusetts Institute of Technology in 1980. At sixteen Rogoff dropped out of school to concentrate on chess. He won the United States Junior Championship in 1969 and spent the several years living primarily in Europe. Rogoff was awarded the IM title in 1974, and the GM title in 1978, in other tournaments, he drew for first at Norristown in 1973 and at Orense in 1976. He has also drawn individual games against former world champions Mikhail Tal, in 2012 he drew a blitz game with the worlds highest rated player Magnus Carlsen. Early in his career, Rogoff served as an economist at the International Monetary Fund, Rogoff was the Charles and Marie Robertson Professor of International Affairs at Princeton University. In 2002, Rogoff was in the spotlight because of a dispute with Joseph Stiglitz, after Stiglitz criticized the IMF in his book, Globalization and Its Discontents, Rogoff replied in an open letter. Their calculations demonstrated that high debt countries grew at 2.2 percent, rather than the −0.1 percent figure initially cited by Reinhart, Rogoff and Reinhart claimed that their fundamental conclusions were accurate after correcting the coding errors detected by their critics. They disavowed their claim that a 90% government debt-to-GDP ratio is a tipping point for growth outcomes. The subject remains controversial, because of the ramifications of the research, though in Rogoff. Has falsely equated our finding of an association between debt and growth with an unambiguous call for austerity. Rogoff refused to comment on a recent article in the Harvard Crimson about the use of marijuana at Harvard despite writing a book on the black markets. 2004, Council on Foreign Relations Economic Advisory Panel of the Federal Reserve. National Academy of SciencesAmerican Academy of Arts and Sciences 2008, Group of Thirty. This Time is Different, An Interview with Kenneth Rogoff at the Wayback Machine, Nicholas Rugoff, The Politic, May 1,2010 Open Letter to Joseph Stiglitz

Kenneth Rogoff
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Kenneth Rogoff

19.
International Standard Book Number
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The International Standard Book Number is a unique numeric commercial book identifier. An ISBN is assigned to each edition and variation of a book, for example, an e-book, a paperback and a hardcover edition of the same book would each have a different ISBN. The ISBN is 13 digits long if assigned on or after 1 January 2007, the method of assigning an ISBN is nation-based and varies from country to country, often depending on how large the publishing industry is within a country. The initial ISBN configuration of recognition was generated in 1967 based upon the 9-digit Standard Book Numbering created in 1966, the 10-digit ISBN format was developed by the International Organization for Standardization and was published in 1970 as international standard ISO2108. Occasionally, a book may appear without a printed ISBN if it is printed privately or the author does not follow the usual ISBN procedure, however, this can be rectified later. Another identifier, the International Standard Serial Number, identifies periodical publications such as magazines, the ISBN configuration of recognition was generated in 1967 in the United Kingdom by David Whitaker and in 1968 in the US by Emery Koltay. The 10-digit ISBN format was developed by the International Organization for Standardization and was published in 1970 as international standard ISO2108, the United Kingdom continued to use the 9-digit SBN code until 1974. The ISO on-line facility only refers back to 1978, an SBN may be converted to an ISBN by prefixing the digit 0. For example, the edition of Mr. J. G. Reeder Returns, published by Hodder in 1965, has SBN340013818 -340 indicating the publisher,01381 their serial number. This can be converted to ISBN 0-340-01381-8, the check digit does not need to be re-calculated, since 1 January 2007, ISBNs have contained 13 digits, a format that is compatible with Bookland European Article Number EAN-13s. An ISBN is assigned to each edition and variation of a book, for example, an ebook, a paperback, and a hardcover edition of the same book would each have a different ISBN. The ISBN is 13 digits long if assigned on or after 1 January 2007, a 13-digit ISBN can be separated into its parts, and when this is done it is customary to separate the parts with hyphens or spaces. Separating the parts of a 10-digit ISBN is also done with either hyphens or spaces, figuring out how to correctly separate a given ISBN number is complicated, because most of the parts do not use a fixed number of digits. ISBN issuance is country-specific, in that ISBNs are issued by the ISBN registration agency that is responsible for country or territory regardless of the publication language. Some ISBN registration agencies are based in national libraries or within ministries of culture, in other cases, the ISBN registration service is provided by organisations such as bibliographic data providers that are not government funded. In Canada, ISBNs are issued at no cost with the purpose of encouraging Canadian culture. In the United Kingdom, United States, and some countries, where the service is provided by non-government-funded organisations. Australia, ISBNs are issued by the library services agency Thorpe-Bowker

International Standard Book Number
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A 13-digit ISBN, 978-3-16-148410-0, as represented by an EAN-13 bar code